During Intel's earnings conference call Tuesday, CEO Paul Otellini said inexpensive "ultra-thins" will give users what they're missing in Netbooks, a theme that the chipmaker has been reiterating in various forums lately.

Acer Aspire Timeline ultra-thin laptop
Acer

Intel continues to try to maneuver this new and more profitable category of laptops into territory where Netbooks continue to hold mindshare. Ultra-thins are low-cost laptops, typically with 13-inch screens, based on Intel's ultra-low-power (ULV) chips. Netbooks have screens usually no larger than 11 inches and use Intel's lower-cost, lower-performance Atom processor.

Echoing prior comments by other executives, Otellini said that ultra-thins address the Netbook's shortcomings. "When people try to do 3D games on these things (Netbooks) or try to run their office applications on them, they tend to think it's a bit slow and that isn't just the processor, it's the entire architecture," he said in response to analyst's question during the conference call, which was streamed on Intel's Web site.

"Now, if you want a thin and light notebook, you don't have to just pick a Netbook. You can pick an affordable notebook that has more functionality," Otellini said.

Well-established consumer perceptions of Netbooks and the higher prices of ultra-thins, such as the $699 Acer Aspire Timeline, makes the latter a challenge to position in the marketplace.

"When we first released our ultraportable (ultra-thin) a lot of people looked at it and said, 'oh it's Netbook,'" said Kelt Reeves, president of enthusiast PC maker Falcon Northwest. "No, it's close to a Netbook in size but it's much, much more capable," Reeves said, addressing user misconceptions.

Windows 7 may not go very far in correcting all the confusion. "Windows 7 runs well even on a $199 Netbook," said Ashok Kumar, an analyst at investment bank Collins Stewart. Kumar said Intel may continue to have trouble managing consumer perceptions of Netbooks and ultra-thins.

Otellini also revisited the subject of cannibalization--that is, the tendency for Netbooks to take market share from more mainstream laptops. "We're talking about a total cannibalization that's probably no more than 20 percent," Otellini said, in response to another analyst question.

The Intel CEO also said that Netbooks may become increasingly popular as a wireless 3G device sold by telecommunications companies. "I think in 2010 that's likely to be a large part of the business...There was a Best Buy, Sprint Netbook ad last week at $0.99 if you signed up for two years...And you'll start seeing more of that," he said.

About the author

Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.
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